Correlation Between MIRAMAR HOTEL and Capri Holdings
Can any of the company-specific risk be diversified away by investing in both MIRAMAR HOTEL and Capri Holdings at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining MIRAMAR HOTEL and Capri Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MIRAMAR HOTEL INV and Capri Holdings Limited, you can compare the effects of market volatilities on MIRAMAR HOTEL and Capri Holdings and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in MIRAMAR HOTEL with a short position of Capri Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of MIRAMAR HOTEL and Capri Holdings.
Diversification Opportunities for MIRAMAR HOTEL and Capri Holdings
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MIRAMAR and Capri is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding MIRAMAR HOTEL INV and Capri Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capri Holdings and MIRAMAR HOTEL is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on MIRAMAR HOTEL INV are associated (or correlated) with Capri Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capri Holdings has no effect on the direction of MIRAMAR HOTEL i.e., MIRAMAR HOTEL and Capri Holdings go up and down completely randomly.
Pair Corralation between MIRAMAR HOTEL and Capri Holdings
Assuming the 90 days trading horizon MIRAMAR HOTEL is expected to generate 10.03 times less return on investment than Capri Holdings. But when comparing it to its historical volatility, MIRAMAR HOTEL INV is 8.36 times less risky than Capri Holdings. It trades about 0.15 of its potential returns per unit of risk. Capri Holdings Limited is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,853 in Capri Holdings Limited on September 5, 2024 and sell it today you would earn a total of 325.00 from holding Capri Holdings Limited or generate 17.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MIRAMAR HOTEL INV vs. Capri Holdings Limited
Performance |
| Timeline |
| MIRAMAR HOTEL INV |
| Capri Holdings |
MIRAMAR HOTEL and Capri Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MIRAMAR HOTEL and Capri Holdings
The main advantage of trading using opposite MIRAMAR HOTEL and Capri Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MIRAMAR HOTEL position performs unexpectedly, Capri Holdings can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Capri Holdings will offset losses from the drop in Capri Holdings' long position.| MIRAMAR HOTEL vs. TOTAL GABON | MIRAMAR HOTEL vs. Walgreens Boots Alliance | MIRAMAR HOTEL vs. Peak Resources Limited |
| Capri Holdings vs. Meli Hotels International | Capri Holdings vs. Chuangs China Investments | Capri Holdings vs. MIRAMAR HOTEL INV | Capri Holdings vs. Playa Hotels Resorts |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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